House lawsuit doesn’t stop Obama executive orders

The House’s vote to sue President Barack Obama for allegedly abusing his executive authority won’t dissuade him from keeping up his executive action drive, administration officials said Thursday as they discussed the latest step in the president’s “pen and phone” campaign to evade congressional gridlock.

Obama’s latest move is an executive order he plans to sign Thursday making it harder for companies with a record of labor law violations to land federal contracts.

“The lawsuit that was empowered yesterday out of the House of Representatives will not help any individual American. It wastes valuable congressional time, and it has the potential to waste millions of taxpayer dollars,” said one administration official who insisted on anonymity while briefing reporters on the new order. “In the wake of that, the president is even more energized about him using the authority that he has to actually help individual Americans. … This executive order today is a great example of that.”

The order requires companies bidding on federal contracts valued at more than $500,000 to disclose a three-year history of labor-law violations. Firms with a history of serious violations could lose contracts to other companies with better track records.

A Government Accountability Office report issued in 2010 found that many of the companies incurring the largest fines for wage-and-hour or workplace-safety violations went on to win new federal contracts.

Administration officials sought to calm fears that the new policy will mean reams of new paperwork for prospective government contractors and that minor violations could get companies effectively barred from competing for contracts.

“A single violation would generally not rise to the threshold” for negative treatment under the new policy, one official said. “We are looking for a particularly egregious or pervasive pattern of violations.”

Firms that have no violations will be able to check a single box declaring that and will have no other burdens related to the new rule, the official said.

While the labor union-friendly policy is being announced several months before the midterm elections, it will not kick in until 2016, the White House said.

By making some contract bidders less competitive, the policy has the potential to drive up contracting costs and encourage agencies to send more work to federal employees, something government worker unions have long favored.

However, administration officials said that is not the intent of the new policy and they insisted that the rules will actually result in taxpayers getting better value from stronger companies.

“This executive order is not intended to make it more expensive or create barriers to entry for contracting and in fact it improves the economic efficiency of our federal contracting process by actually putting us in a position where we’re getting better goods and services,” one official said. “This is about ensuring that employees are protected from being preyed upon.”

“We believe this will help the best contractors actually continue to be competitive,” another official added.

The order also includes a provision prohibiting companies with contracts of $1 million or more from forcing employees into arbitration over claims of discrimination, sexual assault or harassment. The military has been enforcing such a policy for several years in accordance with a congressional mandate. Blocking arbitration agreements will give employees more leverage in such disputes and is also something eagerly sought by trial lawyers.

Obama’s order was immediately hailed by labor groups, who seemed to be well-informed in advance about the details of the president’s planned action.

“Holding contractors to basic labor standards not only ensures that the federal government is getting the proper value for its dollar, it will protect responsible contractors in the marketplace from unfair competition by unethical employers who profit from their violations of the labor and employment laws that all employers are required to respect,” Service Employees International Union President Mary Kay Henry said in a statement.

“As workers around the country stand up to demand a living wage and a union, President Obama is doing his part to make sure corporations treat their workers with the respect they deserve. Our economy won’t work for everyone if taxpayer dollars flow to companies that steal wages or create unsafe conditions for their workers,” she added.

However, one building contractors’ group reacted unfavorably to Obama’s move.

”President Obama’s executive order is yet another example of politically motivated executive overreach that will end up harming taxpayers and the economy in the long run,” said Geoff Burr of the Associated Builders and Contractors. “We are concerned these sweeping changes threaten the due process rights of federal contractors and conflict with existing federal procurement and labor law. While we appreciate efforts to ensure contractors comply with complex laws, the subjective nature of the order opens the door to favoritism and abuse of government contractors by administration officials.”

The lawsuit the House voted to authorize Wednesday, largely along partisan lines, would cover only Obama’s delayed implementation of aspects of the Affordable Care Act. However, House Speaker John Boehner has complained about a variety of unilateral actions by Obama in areas ranging from immigration to welfare reform.